Team Building - Hiring Talent

The following is a list of the post titles by author under this topic. Scroll further down this page to find the actual blog post by your selected author. Author’s posts appear in reverse alphabetical order. For example, following this list, Fred Wilson’s posts appear towards the beginning of the blog page, and Marc Andreessen’s posts appear towards the end of the blog page.

MARC ANDREESSEN (2 posts)

Marc Andreessen: Do Whatever is Required to get to Product/Market Fit

Marc Andreessen: What Causes Success

JEFF CLAVIER (1 post)

Jeff Clavier: Jeff Clavier: What I Look at When Investing

RON CONWAY (1 post)

Ron Conway: What Ron Conway Looks For in a Deal

BRAD FELD (1 post)

Brad Feld: Brad Feld's Investment Criteria

BILL GROSS (2 posts)

Bill Gross: Lessons from Flops

Bill Gross: Balance Entrepreneur's Strengths

ROB HAYES (1 post)

Rob Hayes: Red Flags: Signals Not to Invest

JOSH KOPELMAN (2 posts)

Josh Kopelman: Companies are Bought, not Sold

Josh Kopelman: Invest in Teams that Adapt to Change

MIKE MAPLES JR. (2 posts)

Mike Maples Jr.: When a Team Meets a Market

Mike Maples Jr.: Mike Maples Jr.: What I Look For

BASIL PETERS (1 post)

Basil Peters: Basil Peters: What He Looks for in Successful Entrepreneurs

NAVAL RAVIKANT (1 post)

Naval Ravikant: 5 Main Qualities of an Exceptional Startup

MARK SUSTER (1 post)

Mark Suster: Early Stage Technology Investments Come Down to 4 'M's'

FRED WILSON (11 posts)

Fred Wilson: Sustainability by Fred Wilson

Fred Wilson: Hire Slowly & Wisely, not Quickly

Fred Wilson: What's the Magic

Fred Wilson: What's the "Right" Monthly Burn Rate

Fred Wilson: Building Product is about having the Right Team

Fred Wilson: Management is Relevant when Building Usage

Fred Wilson: Culture, Values & a Vow to a Great Workplace are Everything

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“I think that great venture capitalists care more about the company than they do their investment. []

They’re not focused on money, they’re not focused on how much of the company they own, they’re not focused on the financial metrics so much. [] They’re focused on strategy, product, management team, building a world class organization, all those things [].”

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“Some entrepreneurs and CEOs buy into "hire the best talent available" mantra. [] The other approach [Wilson advocates] is [to] hire for culture and fit.

[] Diversity should be a core value of the team building process. [Seek] diversity of thought, experience, mindset, and angle of attack.

Don't hire a token []. But most importantly, hire people who will enjoy working together, who fit well together, who will make each other better. This is what hiring for cultural fit means. [Start] with the founding team and build on top of that.

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“Most CEOs [Wilson] know[s] interview every hire [until headcount reaches over 100]. Even if [there’s an HR (human resource) head] and a top notch recruiting team, the responsibility for hiring is [the CEO’s]. A bad hire is [the CEO’s] fault. A good hire is [the CEO’s] success. [The CEO should] make the final call on each hire until [the] company is developed [and strong enough] to start making these hires themselves. That is how [to] build a great team,[culture and] company.” Fred Wilson, MBA Mondays: Best Hiring Practices, Jun. 11, 2012; http://www.avc.com/a_vc/2012/06/mba-mondays-best-hiring-practices.html

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

Wilson offers entrepreneurs suggestions on where to find strong talent: “1) People [they] know and people [their] team knows. This is [] often the most fruitful source of talent. I know an entrepreneur who asks everyone he hires [], “who is the most talented person you have ever worked with and whom you would love to work with again?” [] 2) People [working] for [competitors]. [] 3) [Recently purchased companies]. [] 4) Other parts of the country and the world. [] 5) Colleges. [] 6) The big companies in [their] market. [] 7) [Their] investors.” An investor’s major job is recruiting talent.

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

Once the user base supports a long-term sustainable business (stage 2), the final “building the business” stage begins, i.e., building a management team including leaders for engineering, product, customer support, finance, marketing, sales, business development and HR (human resources).

“Founders should think of the business as [the ultimate product being built] because from the company can come [additional products and initiatives]. The company, if built correctly [with strong founder commitment], will be more important than any single product it can create”.

Wilson recommends that the founder /CEO have “a partner to help [] build the company” like a senior, experienced HR leader or “a strong number two, a President or COO.”

“[The] people side of the business is harder and way more complicated than building a product is. [Culture], values and a commitment to creating a fantastic workplace [must] come from the top [and are everything]. [] [If] there is a meaningful culture that the entire team buys into, the team will stick together [and surmount challenges].

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

Once the product has been built, launched and achieved ‘product market fit’, “it is time to get more users or customers [as the company enters] the “building usage” phase.”

This means the team must now be built including more engineers to scale the product/service and more employees in product, customer support, marketing and business development, sales (if an enterprise/SAAS focus) and administration. Team size will at least double from building product’s stage with upwards of twenty when the building usage stage is exited.

Management issues herein: 1. managing engineering (where most of the headcount now is), i.e., recruiting, retaining and sometimes terminating engineers. “[The] right people [must work] on the right things, [teams must execute and] the right environment” must exist for engineering success.

“[Many] technical co-founders and lead engineers [don’t] enjoy managing.” Wilson suggests helping a lead engineer become a good manager or hiring “a VP Engineering who is a great manager and move [the] technical co-founder or lead engineer into a more technical role [ i.e., CTO or chief technology officer]”.

2. Founder/CEO’s challenge of navigating more direct reports. With potentially 10 + direct reports, a founder/CEO in management crisis can occur. Wilson suggests “find[ing] [team members with] management talent or inclination and invest in their ability to help [] manage the team” while “building communication systems, business processes, feedback, and routines [to efficiently scale the business and team]. [He] suggest[s] that founder/CEOs [][work] with coaches [to build management skills].”

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“The first stage of a startup, [] the Building Product stage is management light. The team should be small [with typically five or fewer: the founder/CEO (usually the product manager), often a technical co-founder leading development, two or three developers and maybe a designer].

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“The number of people [is important in] getting the company building process right. Too many [slows] things down, burn[s] through too much cash, and increase[s] [overhead needlessly]. Too few and [you’ll] be resource constrained and unable to grow as [quickly].”

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

“[Wilson’s] strong bias on [optimal headcount] [] is that less is more. [Repeatedly] [he’s] seen the entrepreneur who wants to hire quickly fail and [] the entrepreneur [who’s] [] slow to hire succeed.”

In his experience with software-based consumer internet businesses, “[] [success] might be most highly correlated with a slow hiring ramp [] [during a company’s early years.] Being resource constrained can be [good] when [] getting started. It forces [] [a] focus on what's working and get[ting] to the rest of the vision later on. []” His advice: “[] hire slowly and wisely instead of quickly.” Fred Wilson MBA Mondays: Optimal Headcount At Various Stages, Jun 4 2012; http://www.avc.com/a_vc/2012/06/mba-mondays-optimal-headcount-at-various-stages.html

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

Wilson believes the concept of sustainability needs greater consideration today in business as “[] the focus on performance and efficiency often comes at the cost of sustainability.

[] sustainability is all about figuring out how to be in business forever. It is about [:] [win/win] business models that [] lead to happy long term customer and supplier relationships [;] [] avoiding the temptation to overreach [] [and] maximize near term profits at the expense of long term health [;] [] adapting [] to changing market dynamics [;] [] building a team and a culture that can survive the loss of the leader and keep going[;] [and] [] many more things like this.” Fred Wilson, Sustainability, Nov. 21, 2011 http://www.avc.com/a_vc/2011/11/sustainability.html

[] [Almost] all VCs care about investing in big markets with ambitious teams.

[] Most VCs want to own between 20-25% minimum of [a] company. [] [Investors need to] own enough [equity] to make it worth their time – thus “money”. And all of this is wrapped up in forward progress that [entrepreneurs] demonstrate over time.” Mark Suster, The Four Main Things that Investors Look for in a Startup, October 6, 2010

“[Ravikant ] broke down the 5 main qualities of an ‘exceptional startup,’ in the following order:

1. Traction2. Team3. Product4. Social Proof5. Pitch/Presentation

[] [Ravikant] explained [] ‘Investors are trying to find the exceptional outcomes, so they are looking for something exceptional [],[so] do one thing exceptionally. As a startup you have to be exceptional in at least one regard.’”

Basil Peters angel investor and Principal Strategic Exits Corporation

“[Peters doesn’t] require [teams to have prior business experience]. I don’t think it’s a good filter, because if you look at the track record of entrepreneurs, there’s very little correlation between whether it’s their first venture or their third or fourth or fifth and success. Very often the greatest success is from the entrepreneur’s first company.

[][Peters doesn’t] usually invest in single entrepreneurs. [Most] of the time, it’s a team that is successful. [] If there’s only one person, there are a lot more failure[s].”

Peters discusses what he looks for in successful entrepreneurs. “Some of the characteristics are that the successful entrepreneurs are always incredibly driven, [] very bright, [] absolutely honest, and [] good leaders. They often have personality defects [and] usually have a significant amount of self-doubt. All entrepreneurs have self-doubt, but the good ones have more self-doubt than the mediocre ones, interestingly.” Basil Peters, Seed Capital From Angel Investors: Basil Peters, CEO and Fund Manager, Fundamental Technologies II, July 2010; http://www.sramanamitra.com/2010/07/05/seed-capital-from-angel-investors-basil-peters-ceo-and-fund-manager-fundamental-technologies-ii

Mike Maples Jr. Founding Partner Floodgate and former entrepreneur

“We just love the companies where the entrepreneurs have a really authentic, passionate understanding of the area and they want to just do something massive.

[] [The] first thing that we look for [in people] is authenticity.[] [The] term serial entrepreneur is not always a positive virtue. We like people who say to us, This is the only company I ever want to do.

The second thing that we look for is completeness in the team. Experience and completeness aren’t necessarily the same thing. A complete team has a combination of business and technical vision and business and technical execution. If you have all four of those bases covered, the probability that you will be stopped by something where you had a blind spot goes down [].

[The] third thing that we look for is how experienced is the team. [] [Those] first two things matter to us more. Execution can be hired; vision can’t. So, it’s that authentic voice and a team that meshes well together in a special way . . . that’s the stuff you can’t hire and fix later. If you get it right when the company starts, then you have a better chance, in our view.” Mike Maples, Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate, July, 2010; http://www.sramanamitra.com/2010/07/13/seed-capital-from-angel-investors-mike-maples-founder-and-managing-partner-floodgate

Josh Kopelman Partner First Round Capital and former entrepreneur

“As soon as you hit print on the business plan, things change. Competitors emerge. Technologies shift. Regulatory changes [affect] your marketplace. Key employees quit. Macro-economic factors impact customer spending. Shit happens. I'd much rather invest in a founding team that shows an ability to adapt to change than one that claims to accurately predict the future. I believe that teams that are nimble, market-focused, and are willing to rapidly test/iterate/shift their plans are more apt to perceive the signals that the music may be stopping.” Josh Kopelman When the music stops... March 10, 2006; http://redeye.firstround.com/2006/03/as_a_little_kid.html

Josh Kopelman Partner First Round Capital and former entrepreneur

“I [] believe that companies are not sold. They’re bought.

In every exit I’ve been fortunate enough to participate in – both big (Half.com or Infonautics) and small (Turntide, del.icio.us, Vamoose.com, e-Touch or Snapcentric) – the opportunity to exit was there only because we had begun to build a company that has differentiated technology, a strong team, offers customers real value, demonstrates traction in the marketplace, and/or solves a real need for the acquirer. You can’t build a company to sell it – I’ve never seen it work.” Josh Kopelman, When the Music Stops… http://redeye.firstround.com/2006/03/as_a_little_kid.html

Rob Hayes Partner First Round Capital

Hayes discusses red flags, things that would make him not want to invest in a founder or entrepreneur.

Red flag: If he doesn’t have the best possible people as part of the initial team pre-funding. “When someone comes to [him] who has already surrounded [himself] with people [] who have quit good jobs [to come and work with him] because they’re so passionate about [] working with this person but also what they’re working on, [] that’s a good indicator.”

Red flag: “[] [The founder] is so enamored with [the] product [to the exclusion of addressing other important business elements.] There have been very few products that have been so good that the world just beat a path to their door [like Google or Facebook]. [] If someone is so enamored with their product that they can’t think through how things might change or they’re focused on one particular slice of the market and they only know that piece of the market and not a much bigger market [], I would be concerned about [that].”